Foreclosures driving record gains in existing-home sales


I Just want to warn you folks right off the bat that this is going to be one of those is the glass half full or half empty? type posts.

On the one hand, the National Association of Realtors is reporting big gains in existing home sales for October (the latest figures) and credits first time buyers rushing to take advantage of the tax credit which has now been extended into next year. Inventories continue to shrink. All good. This now concludes the glass half full portion of this post.

If you look down -- far down -- the news release pumped out by the NAR, you will see something else: So-called "distressed properties" (which conjures up an image in my mind of a house, all by itself, phoning some shrink and asking for prescription meds to battle its depression) account for some 30% of all the October sales.

Distressed properties, of course, are foreclosed properties. This is a reflection of the still never-ending wave of foreclosures that shows no sign of abating anytime soon. Plus, because we are talking distressed properties here, we are also talking about a continuation in the slide of housing prices; with the national median existing-home price now at $173,100, which, says the NAR, is down 7.1% from October of 2008. This is all the glass is half empty portion of this post.